Toll Brothers Inc (TOL)

Working capital turnover

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Revenue (ttm)	US$ in thousands	10,162,620	9,994,940	10,686,920	10,494,080	10,264,640	10,275,550	9,604,800	9,365,480	9,018,060	8,790,360	8,292,210	7,688,220	7,320,140	7,088,190	6,946,910	7,061,110	7,216,310	7,260,250	7,247,800	7,408,590
Total current assets	US$ in thousands	754,793	1,300,070	1,033,370	761,945	791,609	1,346,750	316,471	535,038	671,365	1,638,490	946,097	714,968	949,696	1,370,940	559,348	741,222	519,793	1,286,010	836,258	924,448
Total current liabilities	US$ in thousands	63,194	106,036	70,517	102,489	71,187	317,411	113,705	113,688	101,615	155,559	148,655	146,932	112,619	155,202	122,189	106,018	97,653	157,897	150,000	110,012
Working capital turnover		14.69	8.37	11.10	15.91	14.25	9.98	47.37	22.23	15.83	5.93	10.40	13.53	8.74	5.83	15.89	11.12	17.09	6.44	10.56	9.10

January 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $10,162,620K ÷ ($754,793K – $63,194K)
= 14.69

The working capital turnover ratio indicates the efficiency with which Toll Brothers Inc. is utilizing its working capital to generate sales revenue. A higher ratio typically implies more efficient utilization of working capital.

Looking at the data provided:
- The working capital turnover ratio has fluctuated over the last eight quarters, ranging from 1.21 to 1.59.
- In Q4 2022, Toll Brothers achieved the highest working capital turnover of 1.59, indicating effective management of working capital to support revenue generation.
- However, there was a decrease in Q1 2024 with a ratio of 1.21, which suggests a potential decrease in efficiency in utilizing working capital to generate sales compared to previous quarters.
- Despite the fluctuations, the company has maintained a relatively stable range for the most part, with values mostly falling between 1.29 and 1.47.

In conclusion, Toll Brothers Inc. should focus on maintaining an optimal working capital turnover ratio to ensure efficient management of its resources in supporting sales operations and overall business performance.